The development of a complex multicellular organism requires precisely regulated temporal and spatial patterns of gene expression. This is accomplished, in part, by sequence specific transcription factors which bind to sites in promoters and modulate the rate of initiation. Thus, a thorough understanding of development requires a detailed knowledge of the molecular mechanisms regulating transcriptional initiation. Drosophila melanogaster has two characteristics that make it particularly useful for a biochemical analysis of transcriptional regulation. First, Drosophila embryos provide a plentiful source of material for highly active and faithful cell free transcription extracts. Second, the genetic investigation of Drosophila embryogenesis has provided a wealth of information about regulatory networks which can be used to guide a biochemical analysis. The long term goal of this project is to learn about the mechanisms regulating the expression of genes that govern differentiation along the dorsal/ventral axis of the Drosophila embryo. These gene play an essential role in germ layer establishment, which is a critical process in the development of all complex multicellular organisms. In particular, the proposed experiments will focus on the promoters of the two zygotically active genes decapentaplegic and twist, which play critical early roles in the differentiation of ectoderm and mesoderm, respectively. These promoters, which are active in discrete regions along the dorsal/ventral axis of the embryo, are somehow regulated in response to positional cues in the developing organism. To facilitate these studies, methods for in vitro transcription will be optimized so that the cell-free transcription system faithfully reproduces the regulatory processes observed in vivo. The in vitro transcription system will then be used to identify cis-acting elements in the promoters of decapentaplegic and twist and the transcription factors which interact with them. The roles of these factors in generating spatial and temporal patterns of gene expression will then be determined using extracts of developmentally staged wild-type and mutant embryos. Next, the genes encoding factors regulating development will be isolated and used as probes to ascertain the patterns of expression of these factors. Finally, these factors will be biochemically characterized to elucidate the molecular mechanisms responsible for developmentally regulated transcriptional activation and repression. By contributing to an understanding of the biochemical basis of development, these studies may ultimately clarify the role of genetic and environmental factors in the etiology of developmental disorders. In addition, many of the genes regulating Drosophila development are homologous to vertebrate oncogenes and thus these studies should help to illuminate the molecular mechanisms behind oncogenesis.